As I write this, I’m on board a flight from Seoul, South Korea, to San Francisco, California, on my way home to Boston, having spent the week of Harvard spring break meeting with senior government officials, academics, and leaders of civil society in Tokyo and Seoul on behalf of the Harvard Project on International Climate Agreements. Reflecting on these meetings in Asia and recalling meetings I’ve previously had in Brussels and Washington, some important opportunities and ironies about national and international climate policy come to mind.

These dual outcomes of the Copenhagen conference point to the special importance of two key nations in international climate policy developments this year. I’m not referring to China and the United States (despite the fact that they are, of course, the world’s two leading emitters of carbon dioxide). Rather, I am referring to Korea and Mexico. Why?

First, these two nations are unique in being both long-time members (Korea since 1996, Mexico since 1994) of the Organization of Economic Cooperation and Development (OECD)and members of the group of non-Annex I countries under the Kyoto Protocol, which have no direct commitments under that international agreement. The OECD comes as close as anything to defining the set of industrialized nations of the developed world. Thus, Korea and Mexico have their feet planted firmly both in the developed world and the developing world (a fact that is readily apparent on even brief visits to these nations). This gives Korea and Mexico remarkable credibility with the two key blocks in international climate negotiations. That, on its own, would be of considerable importance, but there is another reality that makes this of even greater significance (and opportunity) in this year of 2010.

Coming out of Copenhagen, many participants in the international climate negotiations (as well as informed observers), noted that the UNFCCC has real limitations as the sole venue for future climate negotiations: too many countries – 192, excessively stringent requirements for agreement – unanimity, and a distinct tendency to polarize debates between developed and developing countries. Two other, potentially supplementary venues stand out as promising: the Major Economies Forum (MEF) and the G20.

The MEF, which has hosted productive discussions among 17 key countries and regions that together account for nearly 90 percent of global carbon dioxide (CO2) emissions, may be somewhat limited by the fact that is was created by and is chaired by the United States, a nation with constrained credibility on climate issues among some countries, particularly in the developing world. The G20, which brings together twenty of the world’s largest economies, focuses on economic as well as other global issues and consists of almost the same set of nations as the MEF, likewise accounting for about 90 percent of global emissions. The G20 could thus be an exceptionally promising supplementary venue for meaningful and realistic climate discussions. And in November of this year, the G20 will be hosted by Korea, when it convenes in Seoul. This gives the Korean government a special role in setting the agenda for the discussions and presiding at the sessions.

The G20 meetings in Seoul will come just two weeks before the Sixteenth Conference of the Parties of the UNFCCC, which will take place in Cancún, Mexico. Thus, the Mexican government is also in a key position this year, because it will hold the Presidency of COP-16.

Add to this the fact that both Korea and Mexico have been particularly creative in their domestic climate policy initiatives and international proposals over the past year. Harvard Kennedy School Professor Jeffrey Frankel notes at his blog — Views on the Economy and the World — that Korea and Mexico were particularly ambitious with their submissions to the Copenhagen Accord, when comparing the submissions of all countries in terms of 2020 emissions targets relative to business-as-usual, controlling for per capita income.

Together, Korea and Mexico, share credibility in the developing and developed worlds, and likewise share unique international legitimacy as the hosts and presidents of the G20 and COP-16 in 2010. This is why these two countries have a remarkable opportunity this year to provide leadership of the international community, and make real progress on negotiations to address the threat of global climate change. Those are the opportunities. Now, let me turn to the ironies that have come to the fore.

Ironies

More than a decade ago, it was the United States, as the leader of the so-called “Umbrella Group,” that successfully fought for the inclusion in the Kyoto Protocol – over the objections of the European Union – of three “flexibility mechanisms” to bring down the costs of meeting the Protocol’s objectives: joint implementation (Article 4), a global emissions reduction credit system, the Clean Development Mechanism (the CDM, Article 12), and emissions trading among countries (Article 17). Ironically, once the George W. Bush administration officially pulled the United States out of the Kyoto Protocol process, it was the European Union that implemented the world’s first CO2 emissions trading program, the European Union Emission Trading Scheme (EU ETS).

Over the past nine months, however, the very phrase, “cap-and-trade,” has evolved from being politically correct in Washington to nothing less than politically anathema. (How and why this happened is a topic for a future essay at this blog.) The great irony is that just when cap-and-trade has been under such vociferous attack in Washington, countries throughout the world are embracing this instrument, recognizing its great potential to address climate change cost-effectively and equitably.

In addition to the EU ETS, already in force, Australia is primed to put its cap-and-trade system in place, as is New Zealand. And just a few days before I arrived in Tokyo, the Japanese cabinet announced that the government will move forward with a cap-and-trade system (in contrast with Japan’s previously proposed sectoral approach). And, not to be outdone, Korea is considering the use of cap-and-trade as an element of its own domestic climate policy.

This irony is striking. Of course, it could be reduced or eliminated if Senators Kerry, Graham, and Lieberman can use their much-anticipated new climate proposal to pull victory from the jaws of anticipated defeat. Only time will tell.

Rob, My main interest at the moment is keeping track of whether a “victory” — as in passage of a bill — would have any meaning from the standpoint of the atmosphere? Given the history of horse trading and watering down required to get sufficient votes, particularly under a Democratic White House, is there a danger of a climate bill — in the long run — being COUNTER-productive? If it’s too weak, but has the veneer of success, it could take off the pressure for heavier lifting of the kind needed to decarbonize a world with growing populations and appetites. Would love to post on your thoughts.

Given that the emissions reductions associated with even a fairly ambitious policy from any single country — including the United States — will have a very small impact on global concentrations, I believe that the key question is whether a specific forthcoming U.S. policy (whether statutory from Congress) or regulatory (from the EPA under the Clean Air Act) will be credible in the eyes of other countries, and hence whether it will induce them to continue or begin taking actions themselves. Perhaps I’m biased by my heavy involvement in the international dimensions. In any event, I believe that Waxman-Markey would meet this test, but I don’t think that the CAA approach through the endangerment finding would.

Thank you for helping me satisfy my predictions of the irony of cap and trade. I do not think it will be passed in the United States at this time as big business is putting more of a foot in the door to stop it. There are also more pressing issues that do need to be solved. The current bills are not the best for the country either.
I do think there is a better way but we do not have a real successful country that is using cap and trade with a healthy economy. Both of these need to go hand and hand. What are your thoughts?

With COP-16 in Cancun all but over and with thus far little to no progress as I understand it what’s your thoughts on the road ahead? As a Swede I had first row access to the debacle in Copenhagen and feel more and more frustrated by the lack of responsibility and will to compromise although the latest reported in he news today gave some hope that some sort of agreement might be hammered out, succeding the Kyoto protocol, where slightly more adaptive critera could be applied to different countries, ie one set for China, one for the US and so on.

I find it ironic that Mexico and Korea hold such positions of importance in this. I do wish that the United States played an even bigger role than we currently are. But, I fear that the current economic conditions will have set us back several years in dealing with some of the critical issues.

About the Author

Robert N. Stavins is the Albert Pratt Professor of Business and Government, Director of the Harvard Environmental Economics Program, and Chairman of the Environment and Natural Resources Faculty Group.

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Disclaimer

The views expressed are solely those of the author and do not imply endorsement by Harvard University, the Kennedy School of Government, or the Belfer Center for Science and International Affairs.
This blog is based in part on columns published by The Environmental Forum, published by the Environmental Law Institute.